Digital China Holdings (00861) announced that its indirect non-wholly-owned subsidiary, Digital China Information Service Group Company Ltd. (000555.SZ), plans to conduct a private placement to raise funds from no more than 35 specific target subscribers. The total amount of funds to be raised is not to exceed RMB 1 billion, and the number of shares to be issued will not exceed 20% of the total issued shares prior to the completion of the private placement. The proposed private placement is subject to approval by the Shenzhen Stock Exchange and registration with the China Securities Regulatory Commission.
Assuming the total fundraising amount does not exceed RMB 1 billion, Digital China Information Service currently plans to use the net proceeds from the placement, after deducting all applicable costs and fees, for the following purposes: approximately RMB 320.91 million will be used to increase investment in artificial intelligence technology; approximately RMB 387.97 million will be used to establish a business base in Eastern China; and approximately RMB 291.12 million will be used to supplement working capital, though the actual amount used for working capital shall not exceed 30% of the total funds raised.
The company intends to use a portion of the proceeds to supplement the liquidity needed for its business development. This is expected to optimize its capital structure, reduce its debt-to-asset ratio, enhance its risk resilience, and better meet the funding requirements for business growth. With the accelerated implementation of its "AI + Finance" strategy and the ongoing advancement of software productization and commercialization, the company's research and development and delivery capabilities are set to improve significantly. This will further expand its business scale, driving sustained growth in revenue and net profit, thereby enhancing overall profitability.
Part of the raised funds will be allocated to increase investment in AI technology. Through the centralized management of various financial knowledge, the company aims to reduce knowledge operation and maintenance costs. The introduction of Retrieval-Augmented Generation (RAG) technology will ensure the accuracy and compliance of outputs from large language models. Additionally, the company plans to develop an intelligent software engineering platform for the financial industry, covering the entire R&D lifecycle. This platform will enable intelligent upgrades in key areas such as demand insight and code generation, improving R&D quality and delivery stability.
Furthermore, the company intends to develop an Agent matrix covering business scenarios including marketing, wealth management, and credit, establishing a "digital employee" system to promote intelligent transformation in related operations. A portion of the funds will also be used to establish an Eastern China business base. As a fintech service provider, the company's core competitiveness highly depends on its R&D and delivery talent. With a strong customer base and large team in Eastern China, and given the stringent system stability requirements of financial clients, localized immediate response can significantly shorten fault resolution time and reduce communication costs.
The establishment of the Eastern China base aims to improve the working environment. Through unified planning, it will achieve office centralization and R&D-delivery collaboration, enhancing resource utilization efficiency and response speed. This will help build an efficient, integrated R&D and delivery system to support business scaling and the company's sustained rapid development. Digital China Holdings is expected to benefit directly from the growth of Digital China Information Service, and the value of its shares is anticipated to increase accordingly, which aligns with the interests of all shareholders.